Collection Agency Reconciliation

Allowance for Doubtful Account Analysis

• Jim Woll• Northern Kentucky University• wollj1@nku.edu

Reconciliation

Refers to the process of ensuring that two sets of records (usually the balances of two accounts) are in agreement.

Comparing the account balances at the collection agencies vs those in your student account system.

Monthly Processes

• Obtain files from collection agencies and NKU student account system

• Process collection agency payments to NKU student account system

• Balance collection agency holdings reports from prior month to current month

• Compare current balances by student id as reported by both collection agency and NKU records

Files to obtain for reconciliation:(pdf, csv, txt, xls)

1. Payment file from collection agency

2. Month end holdings file from collection agency

3. Month end holdings file from your student account system after

processing collection payments and callbacks/returns

Process Payments to Student Account System:

Payment Request

Student ID Main Sub Amount Term Description

0060 0410 1430 EFT/Wire Payments0060 0410 1430 EFT/Wire Payments0060 0410 1430 EFT/Wire Payments0060 0410 1430 EFT/Wire Payments0060 0410 1430 EFT/Wire Payments0060 0410 1430 EFT/Wire Payments0060 0410 1430 EFT/Wire Payments0060 0410 1430 EFT/Wire Payments0060 0410 1430 EFT/Wire Payments0060 0410 1430 EFT/Wire Payments0060 0410 1430 EFT/Wire Payments

Collection Agencies

Collections R US Agency

Checks in the Mail Agency

Pay Up Now Agency

Kentucky Department of Revenue (DOR)

Reconcile Payments Processed to Student Account System:

Collection Agency NKU ExportCollection Agency Payment Amount Payment Amount Difference

Collections R Us 12,156.35 12,156.35 -

Pay Up Now 15,163.05 15,163.05 -

Checks in the Mail 10,025.36 10,025.36

Department of Revenue (DOR) 50,000.00 50,000.00 -

87,344.76 87,344.76 -

Send Email to Comptroller's Office

Collection Payment Receipt ReconciliationAs of March 31, 2014

Prior Holdings Report Balance Accounts Sent

Accounts Closed/Returned

Letter Service Transfer Rounding Payments

Current Holdings Report Balance

Pay Up Now

Letter Service 35,260.00 25,630.00 (35,260.00) 25,630.00

Collections 250,650.00 15,260.00 35,260.00 0.03 12,156.36 258,493.67

Total 285,910.00 25,630.00 15,260.00 - 12,156.36 284,123.67

Collections R US

Letter Service 26,350.00 36,560.00 (26,350.00) 36,560.00

Collections 270,654.00 26,350.00 26,350.00 0.03 15,163.05 255,490.98

Total 297,004.00 36,560.00 26,350.00 - 15,163.05 292,050.98

Checks in the Mail

Letter Service 31,260.00 36,420.00 (31,260.00) 36,420.00

Collections 360,250.00 22,530.00 31,260.00 (0.07) 10,025.36 358,954.57

Total 391,510.00 36,420.00 22,530.00 - 10,025.36 395,374.57

Collection Agency Holding Report ReconcilitionMarch, 2014

Identifying Items to Include on the Reconciliation File:

1. Student ID2. Collection Agency

3. Current Principal Balance 4. Source (NKU or Agcy)

Create a new excel file

StudentID Agency Balance Source

520033678 Pay Up Now 1,072.04 Agency520034126 Pay Up Now 1,703.06 Agency520034216 Pay Up Now 3,068.16 Agency

520034377 Collections R US 379.30 Agency520034436 Collections R US 854.78 Agency520034856 Collections R US 995.05 Agency520035177 Collections R US 2,351.90 Agency

520035425 Checks in the Mail 658.35 Agency520035436 Checks in the Mail 1,735.27 Agency520035677 Checks in the Mail 1,168.68 Agency

520030852 Pay Up Now 811.87 NKU520031177 Collections R US 485.94 NKU520031256 Pay Up Now 895.40 NKU520031583 Checks in the Mail 1,102.69 NKU520031855 Collections R US 2,194.52 NKU520031988 Checks in the Mail 1,089.90 NKU520031986 Collections R US 2,155.94 NKU520032552 Collections R US 1,728.15 NKU520032963 Checks in the Mail 1,089.64 NKU

Pivot TableSum of Balance Column Labels

Coll R US Coll R US Pay Up NowPay Up Now Ck in Mail Ck in Mail

Row Labels Agcy NKU Total Agcy NKU Total Agcy NKU Total520000331 313.35 313.35 626.70 520000726 3,294.96 3,294.96 6,589.92 520001534 227.40 277.40 554.80 520001543 298.19 298.19 596.38 520001771 1,096.71 2,096.71 2,193.42 520002137 2,096.15 2,096.15 4,192.30 520002157 1,680.00 1,680.00 3,360.00 520002548 2,320.61 2,320.61 4,641.22 520002873 2,186.55 2,186.55 4,373.10

Sum of Balance Column Labels

Coll R US Pay Up NowPay Up Now Ck in Mail Ck in Mail

Row Labels Agcy NKU Diff Agcy NKU Total Agcy NKU Total

520000331 - - 313.35 313.35

-

520000726 - - 3,294.96 3,294.96

-

520001534 - - 227.40 277.40 (50.00)

520001543 - - 298.19 298.19

-

520001771 1,096.71 2,096.71 (1,000.00) -

-

520002137 - - 2,096.15 2,096.15

-

520002157 - 1,680.00 1,680.00 -

-

520002548 2,320.61 2,320.61 - -

-

520002873 2,186.55 2,186.55 - -

-

Reconciliation by Student ID

Student Agcy NKU Agcy NKU Agcy NKU Agcy NKU Difference

520007437 3,819.00 4,856.50 3,819.00 4,856.50 (1,037.50) 520013859 632.30 646.55 632.30 646.55 (14.25) 520181292 2,742.36 2,844.72 2,742.36 2,844.72 (102.36) 520192447 2,402.70 2,440.20 2,402.70 2,440.20 (37.50) 520220809 2,447.23 2,597.23 2,447.23 2,597.23 (150.00) 520238530 1,913.58 1,838.58 1,913.58 1,838.58 75.00 520004880 694.54 694.54 - 694.54 520019058 2,462.24 2,462.24 - 2,462.24 520181796 3,700.43 3,700.43 - 3,700.43

Total 13,957.17 15,223.78 694.54 - 6,162.67 - 20,814.38 15,223.78 5,590.60

Collection ReconciliationComparing Agency Reports to NKU Report

March, 2014

Collections R Us Pay Up Now Checks in the Mail Total

Reconciliation by Agency

Count Amount Count Amount Count Amount

Collections R Us 154 253,625.00 154 254,891.61 0 (1,266.61)

Pay Up Now 184 245,163.00 183 244,468.46 1 694.54

Checks in the Mail 169 221,633.00 167 215,470.33 2 6,162.67

507 720,421.00 504 714,830.40 3 5,590.60

Collection ReconciliationAs of March 31, 2014

Per Agency Reports Per NKU Records Difference

Allowance for Doubtful Accounts

Represents the best estimate of the amount of accounts receivable that will

not be paid

Worst Case Scenario – Write Off

Determining the Allowance

Receivable Balance

x -(Estimated Collection Rate)

= Allowance

Auditors

• Consistency

• Detailed Support

Accounts Receivable

Total

KY Depart of Rev (DOR) 3,154,421Collection Agencies 1,915,903Internal Payment Plans 208,228Uncollectable Accounts 226,360Other Receivables 1,694,070

7,198,981

Accounts Receivable AnalysisAs of Fiscal Year End 2013

Allowance for Doubtful Accounts - DOR

Month Sent Amount TotalTo DOR Sent 30 Days 60 Days 90 Days ……. 720 Days 750 Days 780 Days Collected

2011 02 110,625 1,737 2,261 2,231 349 1,276 1,377 40,204

2011 03 473,002 6,412 15,852 11,584 3,051 4,778 5,126 188,941

Total 583,626 8,149 18,113 13,815 3,400 6,054 6,503 229,144

Collection Rate 39.3%

Amount Collected

DOR Fiscal Year End Receivable Balance 4,154,421

Multiplied by Estimated DOR collection rate (40%) (1,661,768)

Allowance 2,492,652

Allowance for Doubtful Accounts - AgenciesCollection Agencies Fiscal Year End Balance 2,915,903

Multiplied by Estimated Agency collection rate (14.5%) (422,806)

Net sent to DOR (85.5%) 2,493,097

Multiplied by Estimated DOR collection rate (40%) (997,239)

Allowance 1,495,858

Month Sent Amount TotalTo Collections Sent 30 Days 60 Days 90 Days ….. 270 Days 300 Days 330 Days Collected

2012 03 723,166 8,832 13,931 14,832 3,469 2,962 5,079 91,791

2012 05 121,463 1,357 2,168 839 1,477 12,999

2012 06 565,149 39,365 6,315 13,494 100,233

Total 1,409,777 49,555 22,414 29,165 4,946 2,962 5,079 205,023

Collection Rate 14.5%

Collection Account Analysis

Amount Collected

Allowance for Doubtful Accounts -Internal Payment Plans

Internal Payment Plans 308,228

Multiplied by Estimated collection rate (25%) (77,057)

Net sent to DOR (75%) 231,171

Multiplied by Estimated DOR collection rate (40%) (92,468)

Allowance 138,702

Allowance for Doubtful Accounts - Uncollectable Accounts

Uncollectable Accounts 326,360

Estimated collection rate (0%) 0

Allowance 326,360

Allowance for Doubtful Accounts - Other Receivables

Sub Total 19,282,547

KEES (Sept) (830,036)

Total 18,452,511

As of August 31, 2012

Total Tuition/Housing/Other Fall ChargesLess Posted Financial Aid

Fall 2012 Billing

Allowance for Doubtful Accounts

Collection Agency Tracking

month Agency # accounts amount term RateJan-13 Collection 313 795,577 Fall 2012Mar-13 Collection 71 127,933 Fall 2012Apr-13 Collection 52 130,238 Fall 2012May-13 Collection 24 53,912 Fall 2012

Total Collection Agency 460 1,107,661 6.0% Rate of expected CollectionFall 2012 Billings as of August 31, 2012 18,452,511 Agency Placement

Internal Payment Plan Tracking

Jan-13 internal pay plan 36 64,052 Fall 2012Feb-13 internal pay plan 16 44,139 Fall 2012Mar-13 internal pay plan 12 27,898 Fall 2012Apr-13 internal pay plan 19 46,388 Fall 2012May-13 internal pay plan 17 34,759 Fall 2012

Total Internal Payment Plan 100 217,235 1.2% Rate of expected InternalFall 2012 Billings as of August 31, 2012 18,452,511 Payment Plan Placement

Collection Agency/Internal Payment Plan PlacementsIn Relation to Fall 2012 Amount Billed

Other ReceivablesOther Receivables Collections Agencies 2,694,070

Multiplied by Amount expected to go to Collection Agencies ( 6%) 161,644

Multiplied by Estimated Agency collection rate (14.5%) (23,438)

Net sent to DOR 138,206

Multiplied by Estimated DOR collection rate (40%) (55,282)

Sub Total Allowance 82,923

Other Receivables Internal Payment Plan 2,694,070

Multiplied by Amount expected to go on Internal Payment Plan (1.2%) 32,329

Estimated Internal Payment Plan collection rate (25 %) (8,082)

Net sent to DOR 24,247

Multiplied by Estimated DOR collection rate (40%) (9,699)

Sub Total Allowance 14,548

Total Other Receivables Allowance 97,471

Allowance for Doubtful Accounts -

Allowance

KY Depart of Rev (DOR) 1,892,652Collection Agencies 982,858Internal Payment Plans 93,702Uncollectable Receivables 226,360Other Receivables 97,471

3,293,045

As of June 30, 2013

Northern Kentucky UniversityAccounts Receivable Analysis

Allowance For Doubtful Accounts